The contract is likely to be signed in the coming
weeks, Castilla said in an interview at the World
Economic Forum in Davos. The company gained as much as 1.7%
in Madrid trading, headed to snap five days of declines.

Peru is expanding and refurbishing its infrastructure from
transportation to telecommunications as an increase of tax
revenue has allowed the government to post a budget surplus
in the last three years.

The project likely will start in the
first quarter, Castilla said. The Spanish engineering
company, which has already begun designing the complex, will
carry out construction over three to four
years, he said.

Peru wants Tecnicas Reunidas to expand the Talara refinerys capacity to almost
100,000 bpd from 65,000 bbl currently, Castilla said. The new
complex will be built in place of the existing one, meaning
its practically a green field project, the minister said.

The company expects to sign the contract in the short term,
and its an expansion of an existing contract,
a Madrid-based official for Tecnicas Reunidas said.

Tecnicas Reunidas will raise debt to finance the project, while the government
plans to extend a guarantee on the debt for as much as $1
billion during the contract, the minister said. This
will allow for access to better borrowing conditions,
he said.

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